Financial Advice Code Committee consultation opens

  • Legal update

    25 June 2024

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The Financial Advice Code Committee (Committee) has opened their consultation on competence, knowledge, and skill (Consultation) which can be found here.

The Financial Markets Conduct Act 2013 (FMC Act) established the Committee to produce and review the Code of Professional Conduct for Financial Advice Services (Code), which can be found here. As part of the Committee’s review obligations, the FMC Act, New Zealand’s international obligations, and consultation feedback must be considered regarding the regulation of financial advice and the provision of financial advice services.

Submissions close on Wednesday, 14 August 2024.

Who should read this? Why?

The proposed amendments to the Code will apply to all Financial Advice Providers (FAP). The amendments reinforce the importance of continuing professional development for FAPs to ensure the provision of quality financial advice, and to ensure that FAPs only advise on matters in which they are sufficiently competent. It follows that FAPs should monitor the consultation’s progress as the amendments are implemented into the Code to ensure that they are aware of the changes to lower their exposure to any lack of compliance.

What does it cover?

The Consultation is promoted by the recent approval of the version 3 New Zealand Certificate in Financial Services (Certificate) by the New Zealand Qualifications Authority, and the Committee’s desire to provide market certainty regarding the current interim status of Code Standard (CS) 7. The purpose of the Consultation is to consider the availability of financial advice for persons seeking that advice, and the quality of financial advice and financial advice services. Any amendments following the Consultation will require approval by the Minister of Commerce and Consumer Affairs, Hon Andrew Bayly.

The Consultation is proposing to amend the Code to:

  1. Recognise version 3 of the Level 5 Certificate. 
  2. Retain the Level 5 Certificate qualification outcomes as the minimum standard of particular competence, knowledge, and skill for designing an investment plan – and remove the interim status of CS7. 
  3. Clarify the requirements for continuing professional development in CS9 to include a more principle-based standard.
What next?

We encourage all FAPs to familiarise themselves with the proposed changes to the Code and engage in the Consultation. We will provide updates as we learn more about the Consultation and the changes this may bring for FAPs.

Our experts would be happy to discuss any aspect of the Consultation outlined above.


This article was co-authored by Andrew Walker, a Law Clerk, in our Financial Services team.